The Software IP Report
Inequitable Conduct After Therasense Does Not Always Require “But-for” Materiality
By Charles Bieneman
Categories: Inequitable Conduct, The Software IP Report
Even under the heightened “but-for” materiality standard for proving inequitable conduct in patent prosecution set forth by the Federal Circuit in Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1287 (Fed. Cir. 2011) (en banc), a pleading would be sufficient that set forth “affirmative egregious misconduct, such as the filing of an unmistakably false affidavit.” Based on allegations that the patent applicant lied to the examiner about certain prior art, the court in Touchtunes Music Corp. v. Rowe International Corp., No. 07 Civ. 11450 (S.D.N.Y. March 13, 2012), allowed the counterclaim-defendant (i.e., for present purposes, the defendant) to amend its complaint to allege inequitable conduct.
The Touchtunes Music court first noted that the defendant had satisfied the notice pleading standard, even under the heightened requirements for pleading fraud under Federal Rule of Civil Procedure 9(b), by setting forth sufficient detail of the patent applicant’s alleged false statements. Specifically, the defendant plead that the patent applicant “intentionally made false statements to the PTO regarding the scope and content of karaoke prior art and concealed the relevance of prior art karaoke references,” including a false declaration “that prior art karaoke machines were not capable of coin operation and did not allow for a customer to select songs without additional assistance.”
The patent owner argued that the but-for materiality requirement of Therasense could not be met because the patent examiner had evidently not considered the reference that the defendant now argued was the subject of the false declaration. That is, if the examiner did not consider the reference, then any statements about the reference made by the patent applicant could not be material. The court rejected this argument, stating that “Therasense does not require but-for materiality in all cases and recognized an exception for cases of affirmative egregious misconduct, specifically including the filing of a false affidavit.”